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Duncan Engineering Ltd.

BSE: 504908 | NSE: | Series: NA | ISIN: INE340F01011 | SECTOR: Auto Ancillaries

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Annual Report

For Year :
2019 2018 2017 2015 2014 2013 2012 2011 2010

Director’s Report

Duncan Engineering Limited

The Directors have pleasure in presenting the Fifty Eighth Annual Report of the Company on the business and operations of the Company, together with the Audited Financial Statements for the year ended March 31, 2019.

Financial Results

The Company''s performance during the financial year ended March 31, 2019 as compared to the previous financial year is summarized below:

(Rs. in Lacs)

Particulars

2018-19

2017-18

Total Revenue

4512.24

4097.16

Total Expenses

-4209.57

(4089.13)

Profit/(Loss) before Tax

302.67

8.03

Profit/(Loss) from continuing operations before Tax

302.67

8.03

Tax Expenses (Current Tax)

32.17

0

Profit/(Loss) from continuing operations after Tax

270.50

8.03

Profit/(Loss) from discontinuing operations before Tax

0

4.41

Tax Expenses (Current Tax)

Profit/(Loss) from discontinuing operations after Tax

0

4.41

Profit/(loss) for the year

270.50

12.44

Dividend

The Board of Directors have not recommended to declare any dividend in order to conserve the fund for the growth of the Company.

Transfer to Reserves

Your Board of Directors propose to transfer Rs. 270.50 Lacs to General Reserve.

Performance

The overall performance of the Company is satisfactory in the year 2018-19. Major restructuring initiatives undertaken by the Board of Directors in last 2-3 years, yielded positive results improving overall performance of the Company. Your company has registered a total revenue of Rs. 4512.24 Lacs with a profit/ (loss)for the year Rs. 270.50 Lacs.The Company has registered a growth of 10% (Rs. 415 Lacs) in comparison to the total revenue of FY 2017-18.

The focus during the year was on streamlining the working capital of the Company which has yielded positive results.

The demand in the market continues to be stable and the Company is hopeful of encasing the growth opportunities available in the coming years.

Operations

Your Company has registered a growth of 10% (Rs. 415 Lacs) in comparison to the total revenue from 2017-18.This was achieved in spite of initiative to correct the working capital cycle and cost reduction initiatives.

Report on performance and financial position of subsidiaries, associates and joint venture companies

During the year under review, your Company did not have any subsidiary, associate and joint venture.

Internal Financial Controls

The Company has an internal control system, commensurate with the size, scale and complexity of its operations. The Scope and authority of the Internal Audit (IA) is as per the works assigned to them by the management. To maintain its objectivity and independence, Internal Audit function reports to the chairman of the Audit Committee of the Board. M/s Pipalia Singhal & Associates are the Internal Auditor of the Company.

The Internal Financial Controls with reference to financial statements as designed and implemented by the Company are adequate. During the year under review, no material or serious observation has been received from the Statutory Auditors and the Internal Auditors of the Company on the inefficiency or inadequacy of such controls.

Public Deposits

The Company has not accepted any fixed deposits from the public or shareholders falling within the ambit of Section 73 of the Companies Act, 2013 and The Companies (Acceptance of Deposits) Rules, 2014.

Particulars of loans/advances/investments outstanding during the financial year

The company has not given any loans or guarantees covered under the provisions of section 186 of the Companies Act, 2013. The details of the Investments made and loan taken by company is mentioned in the Notes to the financial statements.

AUDITORS ANDTHEIR REPORTS

The matters related auditors and their reports are as under:

Statutory Auditor''s appointment

At the Annual General Meeting held on August 3rd, 2017, the Members have approved the appointment of M/s Singhi & Co. Chartered Accountants, Mumbai as a Statutory Auditor of the Company for a period of three consecutive years i.e. for a term up to the conclusion of 59th Annual General Meeting to be held in the calendar year 2020.

The Company has received a certificate from the said Auditors that they are eligible to hold office as the Auditors of the Company and are not disqualified for being so appointed.

Observations of Statutory Auditors on Financial Statements for the year ended March 31, 2019

The observation made in the Auditors Report, read together with the relevant notes thereon are self-explanatory and hence does not call for any comments.

Secretarial Audit

As required under the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, M/s Shaswati Vaishnav & Associates, Company Secretary in Practice has undertaken the Secretarial Audit of the Company for the year ended 31st March 2019. The Secretarial Audit Report is annexed herewith in Form No. MR-3. There are no qualifications, reservation or adverse remarks or disclaimer made by the auditor in the report save and except disclaimer made by them in discharge for their professional obligation.

MATTERS RELATEDTO DIRECTORS AND KEY MANAERGIAL PERSONNEL

Board of Directors and Key Managerial Personnel (KMP)

The following three persons were formally appointed as Key Managerial Personnel of the Company as per the provisions of Sec 203 of the Companies Act, 2013.

a) Mr. Akshat Goenka, Managing Director

b) Mr. K Raghu Raman, Chief Financial Officer

c) Mr. Rajib Kumar Gope, Company Secretary

In accordance with the provisions of the Companies Act, 2013 and in terms of the Memorandum and Articles of Association of the Company, Mr J P Goenka (holding DIN 00136782) is liable to retire by rotation and being eligible for re-appointment, offer himself for re-appointment. Your Directors have proposed his re-appointment as set out in the notice of AGM.

Based on the recommendation of the Nomination and Remuneration Committee and pursuant to the provisions of Sections 149, 150, 152 , 178 and any other applicable provisions of the Companies Act, 2013 and the rules made thereunder (including any statutory modification(s) or re-enactment thereof for the time being in force) read with Schedule IV to the Companies Act, 2013, the Companies (Appointment and Qualification of Directors) Rules, 2014 and Regulation 17(1A) and other applicable provisions of SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2018, your Directors Mr. Brij Behari Tandon,aged about 78 years, Mr. Om Prakash Dubey, aged about 78 years and Mr. Nitin Kaul, aged about 46 years, seeking reappointment as Independent Directors for a 2nd term of five consecutive years up to the conclusion of 63rdAnnual General Meeting of the Company to be held in the calendar year 2024.The details of their re-appointment is mentioned in Explanatory Statement annexed to the Notice of the Annual General Meeting.

Pursuant to Regulation 17 (1A) of the SEBI Listing Obligation & Disclosure Requirements) (Amendment) Regulations 2018, notified on 9th May 2018, no Listed entity shall appoint a person or continue the directorship of any person as a non-executive director who has attained the age of seventy-five years unless a special resolution is passed to that effect passed by the Members of the Company.

The information required pursuant to Section 134(3)(q) and 197 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the Remuneration and other details of Key Managerial Personnel and other Employees for the year ended March 2019 are given in extract of the Annual Return.

Managing Director''s Remuneration:

Mr. Akshat Goenka is the Managing Director of the Company. The remuneration detail of Mr. Akshat Goenka is disclosed in Corporate Governance Report. Mr. Akshat Goenka is also Jt. Managing Director in Oriental Carbon Chemicals Limited, Holding Company. He received a Salary of Rs.12000 and Commission Rs.19.75 Lacs from Duncan Engineering Limited. In addition to the remuneration from Duncan Engineering Limited, he also received a remuneration of Rs. 2,46,41,974/- p.a. from Oriental Carbon & Chemicals Limited.

The details Remuneration drawn by Mr. Akshat Goenka from Oriental Carbon & Chemicals Limited as follows:

(Amt. in Rs.)

Name

Salary

Commision

Contribution to PF & SAF

Perq. And other allowances

Total

Mr. Akshat Goenka

61,20,000

1,07,82,999

16,52,400

60,86,575

2,46,41,974

Commission to Non-Executive Directors

The Board of Directors of the Company have recommended (on the recommendation of the Nomination and Remuneration Committee) for the approval of the members of the Company to pay a sum not exceeding one percent per annum of the Net Profits of the Company as commission calculated in accordance with the provisions of Section 198 of the Companies Act, 2013, be paid to and distributed amongst the Directors other than the Managing Director of the Company in such amounts or proportions and in such manner and in all respects as may be decided and directed by the Board of Directors.

The details of the of the above is mentioned in AGM Notice and Explanatory Statement thereto.

Declaration by Independent Directors

Pursuant to the provisions of sub-section (7) of Section 149 of the Companies Act, 2013, the Company has received individual declarations from all the Independent Directors confirming that they fulfill the criteria of independence as specified in Section 149(6) of the Companies Act, 2013.

Annual Performance Evaluation

As per Section 134(3)(p) of the Companies Act, 2013 read with sub-rule (4) of Rule 8 of the Companies (Accounts) Rules 2014 and SEBI(LODR) Regulation 2015 the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of the other Committees. The performance of the Board was evaluated by the Board of Directors after seeking inputs from all the Directors. The performance of the Committees was evaluated by the Board after seeking inputs from the Committee members. The Board focused on criteria like strategy effectiveness, Board Structure and Committees, Board Meetings and Procedures while evaluating its own performance and that its committees. The Policy on Performance Evaluation is also available on the website of the Company i.e. www.duncanengg.com

For the purpose of evaluation, the Directors have been classified into three categories: Independent Directors, Non-Executive Directors and Executive Directors. Independent & Non- Executive Directors were evaluated on the basis of Engagement, Adherence to Code of Conduct, Strategic Planning, Team Spirit, Consensus Building, leadership and domain knowledge. Whereas Executive Director is evaluated on Management qualities, Team work abilities, Result/Achievements, Domain Knowledge, Understanding & Awareness etc.

DISCLOSURE RELATEDTO BOARD, COMMITTES AND POLICIES

Board and Committee Meetings

The Company holds Meetings as per Companies Act, 2013 and the Listing Agreement signed with the Stock Exchange. During the year four Board Meetings and four Audit Committee meetings were convened and held. The details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013 and SEBI (Listing Obligations Disclosure Requirements) Amendment Regulations, 2018. Additionally, on January 24, 2019, the Independent Directors held a separate meeting in compliance with the requirements of Schedule IV of the Companies Act, 2013.

There were four Board Meetings held in FY 2018-19 on May 25, 2018; August 2, 2018; October 25, 2018 and January 24, 2019.

Director''s Responsibility Statement

To the best of your Director''s knowledge and belief and according to the information and explanations obtained your Directors make the following statements in terms of section 134 (3) (c) of the Companies Act, 2013:

i) that in the preparation of the annual financial statements for the year ended March 31, 2019, the applicable Accounting Standard (Ind AS) have been followed along with proper explanation relating to material departures, if any;

ii) the directors had selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and the profit and loss of the Company for that period.

iii) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing the detecting fraud and other irregularities;

iv) that the annual financial statements have been prepared on a going concern basis;

v) that proper financial controls were in place and that the financial controls were adequate and were operating effectively.

vi) that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

Audit Committee

The Audit Committee comprises four Non-Executive and Independent Directors namely, Mr. O P Dubey (Chairman), Mr. B B. Tandon (Member), Mr. Nitin Kaul (Member) and Mrs. Arti Kant (Member). All the recommendations made by the Audit Committee during the year were accepted by the Board. Chief Financial Officer and Auditors are permanent invitees to the committee meetings. The detail of terms of reference of Audit Committee, number and dates of meetings held, attendance of the directors and remunerations paid to them are given separately in the Corporate Governance Report.

Nomination and Remuneration Committee

The Nomination and Remuneration Committee has Mr. O P Dubey as Chairman, Mr. B B Tandon, Mr. Arvind Goenka and Mr. Nitin Kaul as Members. The Company has a policy on Directors appointment & remuneration which is posted on the website of the Company. The details terms of reference of the committee has been given in the Corporate Governance Report.

The Stakeholder''s Relationship Committee:

The Company has a Stakeholder''s Relationship Committee for reviewing shareholder/investors complaints. The present members of this committee are Mr. J P Goenka (Chairman), Mr. O P Dubey (Member) and Mrs. Arti Kant (Member). The detail terms of reference of the committee has been given in the Corporate Governance Report.

Remuneration Policy

The Board has, on the recommendation of the Nomination and Remuneration Committee, framed a policy to ensure that Company''s Directors, Key Managerial Personnel and other senior management employees are sufficiently incentivised for enhanced performance. Remuneration should be reasonable and sufficient to attract and retain employees. Independent Directors receive remuneration by way of sitting fees for attending meetings of Board and Board Committees (where they are members). The Remuneration Policy of the Company is also available on the website of the Company which is www.duncanengg.com.

Vigil Mechanism/Whistle Blower Policy

The Company has a vigil mechanism named Whistle Blower Policy to deal with instances of fraud and mismanagement, if any. A vigil (Whistle Blower) mechanism provides a channel to the employees and Directors to report to the Management, concerns about unethical behaviour, actual or suspected fraud or violation of the Codes of Conduct or Policy. The mechanism provides for adequate safeguards against victimization of employees and Directors to avail of the mechanism and also provide for direct access to the Managing Director / Chairman of the Audit Committee in exceptional cases. The details of the Whistle Blower Policy are explained in the Corporate Governance Report as well and also posted on the Company''s website i.e. www.duncanengg.com.

Risk Management Policy

The Board of Directors of the Company look into the element of risk associated with the Company. At present the company has not identified any element of risk which may threaten the existence of the Company.

Corporate Social Responsibility (CSR)

CSR provisions are not applicable to the Company as it falls outside the criteria recommended under Companies Act, 2013 and the Rules made there under.

Fraud Reporting

During the year under review, no instances of fraud were reported by the Statutory Auditors of the Company.

Sexual Harassment at workplace

The Company has in place an Anti-Sexual Harassment Policy line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. An internal committee has been set up to redress complaints received regarding sexual harassment. No complaint received during the year under review.

OTHER DISCLOSURES

Extract of the Annual Return

Pursuant to Section 134(3)(a)and Section 92(3) of the Companies Act, 2013 read with Companies( Amendment) Act, 2017, an extract of Annual Return (eForm MGT-9)is available on the website of the company www.duncanengg.com under investor dropdown.

Corporate Governance

As per Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a section on Corporate Governance and Management Discussion and Analysis is annexed to this report.

A certificate from M/s Vaishnav Associates, Pune (ACS 8675, C.P. No. 11392) confirming compliance of Corporate Governance is also annexed.

Conservation of Energy,Technology Absorption, Exports and Foreign Exchange Earnings and Outgo

A statement giving details of conservation of energy, technology absorption, exports and foreign exchange earnings and outgo pursuant to Section 134(3) (m) read with Companies (Accounts) Rules, 2014 is annexed to Board''s Report.

Particulars of Employees and Remuneration

The information as required under the provisions of Section 197(12) of the Companies Act, 2013 and Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are set out in Annexure attached herewith and which forms part of this report.

Transfer of shares to Investor Education & Protection Fund

Pursuant to second proviso to Rule 6 of Investor Education & Protection Fund Authority (Accounting, Audit, Transfer & Refund) Rules, 2016 read with General Circular No. 12/ 2017 dated 11.06.2017- IEPF, wherein the seven years'' period provided in sub section (5) of Section 124 is completed for unpaid / unclaimed dividends during September16, 2016 to October 31, 2017, the due date of transfer of dividend is October 31, 2017. As per the provision unpaid/ unclaimed dividend for 2009-10 fall within above range of date, hence the shares were transferred to IEPF. Consequently, your Company has duly followed the procedure of transferring the shares pertaining to unclaimed dividend for the year 2009-2010 and transferred 13276 shares to IEPF through Corporate action.

Reorganisation of Distinctive Numbers

SEBI vide its circular mandated all listed companies to upload the distinctive number data of the listed shares in the depository systems along with the mode (physical/demat) of holding. Accordingly, the Board of Directors of the Company approved reorganisation of distinctive numbers and issue of new certificates along with rearranged distinctive number in place of the old certificates to the shareholders holding the shares in physical form.

Related Party Transactions

All related party transactions that were entered into during the financial year were on arms'' length basis and were in the ordinary course of business. There are no materially significant related party transactions made by the Company with promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of Company at large. All Related Party transactions form part to the Notes to the Balance Sheet. All Related Party transactions are placed before the Audit Committee. Prior omnibus approval of the Audit Committee is obtained for the transactions which are of foreseen and repetitive nature. The approved Policy on Related Party transactions is also available on the website of the company www.duncanengg.com under investor dropdown.

Accounting Treatment

The Accounts for the year have been prepared as per Indian Accounting Standards (Ind AS) and all the current year and previous year figures have been re-stated accordingly. No treatment different from that prescribed in Accounting Standards (Ind AS) has been followed by the Company.

Research and Development

Research & Development is fundamental to the Company''s efforts to maintain the technical and quality edge. New products are continuously being developed to meet customers varied requirements. Research in the areas of reducing utilities cost and process parameters improvement is also being done.

Disclosures under Section 134(3)(l) of the Companies Act, 2013

Except as disclosed elsewhere in this report, no material changes and commitments which could affect the Company''s financial position have occurred between the end of the financial year of the Company and date of this report.

Disclosure of Orders passed by Regulators or Courts or Tribunal

No significant and material orders have been passed by any Regulator or Court or Tribunal which can have impact on the going concern status and the Company''s operations in future.

Disclosure relating to equity shares with differential rights

The Company has not issued any equity shares with differential rights during the year under review and hence no information as per provisions of Rule 4(4) of the Companies (Share Capital and Debenture) Rules, 2014 is furnished.

Disclosure relating to sweat equity shares

The Company has not issued any sweat equity shares during the year under review and hence no information as per provisions of Rule 8(13) of the Companies (Share Capital and Debenture) Rules, 2014 is furnished.

Disclosure relating to Employee Stock Option Scheme and Employee Stock Purchase Scheme

The Company does not have any Employee Stock Option Scheme or Employee Stock Purchase Scheme. Hence no information as per the provisions of Rule 12(9) of the Companies (Share Capital and Debenture) Rules, 2014 has been furnished.

Disclosures in respect of voting rights not directly exercised by employees

There are no shares held by trustees for the benefit of employees and hence no disclosure under Rule 16(4) of the Companies (Share Capital and Debentures) Rules, 2014 has been furnished.

Pollution Control

Your Company''s Plant has the requisite consent to operate from Maharashtra Pollution Control Board and meets all the desired and statutory norms in this regard.

Statutory Compliance, Strictures and Penalties:

The Company has complied with rules and regulations prescribed by the Bombay Stock Exchange, Securities Exchange Board of India and any other statutory authority relating to capital market.

No penalties and/or strictures have been imposed on the Company by Stock Exchange or SEBI or any statutory authority during the last three years.

Acknowledgments

Your Directors would like to thank to the employees, customers, suppliers, bankers, business partners, other regulatory agencies and wish to acknowledge and place on record their sincere appreciation for the excellent support given by them to the Company and their confidence in its Management. Your Directors would also like to thank the members of the Company for reposing their confidence and faith in the Company and its Management.

On behalf of the Board of Directors

Akshat Goenka Arvind Goenka

Place: Noida Managing Director Director

Date: May 6, 2019 DIN: 07131982 DIN: 00135653

Director’s Report